18 Non-Profit Corporations, Charities, Foundations and State Attorneys General 18 Non-Profit Corporations, Charities, Foundations and State Attorneys General
18.1 Introduction 18.1 Introduction
18.1.1 General Introduction 18.1.1 General Introduction
State attorneys general have always had some responsibility to review the operations of non-profit charities and foundations. Unlike like for-profit sectors of the economy, which answer to boards of directors and shareholders, attorneys generall often are the only entity with responsibility over non-profit charities and foundations. Particularly because the 1.8 million non-profit organizations, such as hospitals, health insurers, and universities, contribute over a trillion dollars to the economy, the attorneys general’ use of that authority has taken on national significance.
18.1.2 Detailed Roadmap to Core Readings 18.1.2 Detailed Roadmap to Core Readings
Before considering the role of AGs in monitoring and regulating non-profit entities, the initial readings should provide a feel for the size of this segment of the economy. It amounts to trillions of dollars of the economy.
The NAAG chapter and the TX memo (with very funky formatting) explain the role of the AG and factors that might affect whether the AG does anything in this sphere.
The next set of readings consider first the tension between the First Amendment and preventing fraud through registration or mandatory disclosures. The readings then look at the use of the bully pulpit to educate consumers about charities and fake charities.
In a series of AG cases involving charities, the goal sometimes is to reform the mission of the charity, sometimes to get rid of bad actors, and sometimes to shut down a fraudulent charity.
The readings taking a deeper dive into the NY AG's case against the NRA, in which the question is whether the AG was taking the right actions for the right reasons. Similarly, several AGs took action against the Black Lives Matter foundation. Once again, the issue was whether these AGs were taking the right actions for the right reasons.
18.2 Nonprofit Sector Background 18.2 Nonprofit Sector Background
18.2.1. The Nonprofit Sector in Brief, National Center for Charitable Statistics, The Urban Institute (June 2020)
18.2.2. Health of the US Non-Profit Sector, Independent Sector (Oct. 2021) (edited)
18.3 Attorney General Charities Authority 18.3 Attorney General Charities Authority
18.3.1. Robert Carlson, State Attorneys General Powers and Duties, NAAG, Ch. 12 (Charities) (2018)
18.3.2. TX AG, A Guide to Charitable Trust Case Review (2010)
18.4 Charities Registration, Regulation, and Education 18.4 Charities Registration, Regulation, and Education
18.4.1. Riley v. Nat'l Fed. of the Blind, 487 U.S. 781 (1988) (edited)
18.4.2. Illinois ex rel. Madigan v. Telemarketing Associates, Inc., 538 U.S. 600 (2003) (edited)
18.4.3. InfoCision Mgt. Corp. v. Griswold, 570 F. Supp. 3d 1051 (D. Colo. 2021) (edited)
18.4.4. NY AG Releases Annual Pennies for Charity Report, NY AG website (Nov. 28, 2022)
18.4.5. HI AG warns of Maui charity scams, Spectrum News (Oct. 7, 2023)
18.5 Attorney General Non-Profit Cases 18.5 Attorney General Non-Profit Cases
18.5.1. MO AG Recommends Changes at Kauffman Foundation, Philanthropy news (Mar. 8, 2004)
18.5.2. Inappropriate Expenditures Found at the Getty, Los Angeles Times (Oct. 2, 2006)
18.5.3. 4 Cancer Charities Accused of Fraud, N.Y. Times (May 19, 2015)
18.5.4. Tea party activists accused of misusing charity funds, Los Angeles Times (July 24, 2019)
18.5.5. OH AG Recovers Donations from Phony Charity Claiming to Benefit Train Derailment Victims, OH AG website (June 7, 2023)
18.5.6. MN AG Prevails on Appeal on Removal of Trustee, MN AG website (Feb. 7, 2024)
18.5.7 Black Lives Matter 18.5.7 Black Lives Matter
18.5.7.1. Black Lives Matter Suspends Online Fundraising after State AGs Threaten Legal Action, National Review (Feb. 3, 2022)
18.5.7.2. Todd Rokita sues Black Lives Matter for not handing over docs, tax info, IndyStar (April 28, 2022)
18.5.8 NRA Litigation 18.5.8 NRA Litigation
18.5.8.1. AG James Files Lawsuit to Dissolve NRA (Aug. 6, 2020)
18.5.8.2. NY v. NRA, John Commerford Affidavit (Mar. 8, 2023)
18.5.8.3. Noah Feldman, New York's Attorney General Shouldn't Dismantle the NRA, Bloomberg (Aug. 6, 2020)
18.5.8.4. NRA reports alleged misspending by current and former executives to IRS, Wash. Post (Nov. 25, 2020)
18.5.8.5. Republican attorneys general back NRA in fight against NY effort to dissolve gun rights group, Wash. Post (Dec. 22, 2020)
18.5.8.6. NRA Judge blocks NY AG's attempt to dissolve it but allows suit to proceed, CNN Politics (Mar. 2, 2022)
18.5.8.7. LaPierre Resigns From NRA With Trial Set to Open, N.Y. Times (Jan. 4, 2024)
18.6 Supplemental Reading 18.6 Supplemental Reading
18.6.1. The real reason America’s nonprofit sector is seeing massive growth, Wash. Post (May 12, 2023)
18.6.2. How the IRS Gave Up Fighting Political Dark Money Groups, ProPublica (Apr. 18, 2019)
18.6.3. Cindy Lott, et al., State Regulation and Enforcement in the Charitable Sector (Sept. 2016)
18.6.4. NY AG, Pennies for Charities Report (2022)
18.6.5. Various Attorney General Non Profit cases (2003 - 2019)